Paid Leave Laws Overview of Paid Leave Law s in the Northeast Paid - - PowerPoint PPT Presentation

Paid Leave Laws

October 24, 2019

Overview of Paid Leave Law s in the Northeast

Paid leave required ( state adm inistered)

• Connecticut (family and medical)
• Massachusetts (family and medical)
• New York (family)

Paid leave required

• Maine (for any reason)

Tem porary disability/ caregiver benefits ( state adm inistered)

• Rhode Island (family and medical)

Paid leave bill under consideration

• Vermont (currently considering a bill that, if passed, would

create a mandatory paid family leave program) No state m andated paid leave

• New Hampshire (a bill for paid family and medical leave was

recently vetoed by Gov. Sununu)

MAI NE PAI D LEAVE

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Maine – Evolution of Paid Leave Law Act to Support Healthy Workplaces By Providing Earned Paid Sick Leave An Act Authorizing Earned Employee Leave

Key Provisions – Maine Leave Law

• Goes into effect 1 / 1 / 2 1
• Applies to employers with more than 1 0 em ployees for

more than 120 days in any calendar year.

• Employees must earn at least one hour of paid leave for

every 40 hours worked, up to a total of 4 0 hours per year.

• Accrual must begin at time of hire, but employers may

require 1 2 0 -day tenure before use.

• Paid at “same base rate of pay” as earned before the leave,

and receive same benefits as provided for other paid leaves.

Notice and Scheduling

• Similar to FMLA – employees must

provide reasonable notice of their intent to use leave unless prevented from doing so because of emergency nature of need for leave.

• Employers may require that leave

be scheduled to prevent undue hardship on employer’s operations.

Carry Over and Pay Out

• Statute says nothing about required carry over or payment

upon termination.

• Unless MDOL adopts contrary rules, expect employers may

require leave be used in the year it is earned.

• Payment upon termination?
• Wage payment statute says vacation has the same status as wages.
• Court decisions provide that, because employers aren’t required to
• ffer paid vacation, employers control the terms of paid vacation,

including whether it is payable upon termination.

• Earlier versions of this bill expressly provided sick time was not

payable upon termination, but the bill is now silent.

Enforcem ent / Penalties

• Paid leave law will be enforced by Department of

Labor

• $1,000 per violation

Maine Paid Leave – Bad New s / Good New s

The state statute preempts local paid leave regulations Absent a federal paid leave law that preempts state regulation, multi- state employers must comply with different paid leave laws

Maine Paid Leave Law – Unansw ered Questions

• “One year of employment” – calendar year,

anniversary?

• How do employers calculate accrual for exempt

employees whose hours may not be tracked?

• Can employees be disciplined for misusing paid

leave or failing to follow notification policies?

• Require minimum use, like under FMLA?
• How does the law impact existing PTO policies?
• For example, can employers who permit carry over

still cap accrual?

MASSACHUSETTS PAI D FAMI LY AND MEDI CAL LEAVE

PFML

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Overview

• Effective January 1, 2021
• Up to 20 weeks of medical leave for

employee’s serious health condition

• Up to 12 weeks of family leave to bond with

child or because of qualifying exigency

• Up to 26 weeks of family leave to care for a

family member who is a covered service member

• Effective July 1, 2021
• Up to 12 weeks of family medical leave to

care for a family member with a serious health condition

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Overview ( cont’d)

• Beginning January 1, 2021, covered

individuals eligible “for up to 26 total weeks, in the aggregate, of paid family and medical leave”

• Effective January 1, 2023
• Retaliation prohibited
• To fund the future paid leave, contributions

must be made through MassTaxConnector beginning October 1, 2019

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Tim eline

September 30

• Poster
• Notice to all employees
• New forms available online

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Notice for Current Em ployees and New Hires

• All current employees on or before

September 30

• To all new employees within 30 days of their

first day of employment

• Must be written in the employee’s primary

language

• Must obtain from each employee a written

statement acknowledging receipt of the notice or a statement indicating the employee’s refusal to acknowledge the notice

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Tim eline

October 1

• Begin withholding PFML

contributions

• New rates in effect

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Total W orkforce

• Count all MA W-2 employees
• All W-2 employees who perform services in

the Commonwealth

• Include 1099-MISC contractors only if

they make up more than 50% of your total workforce (i.e., W-2 employees and 1099-MISC employees combined)

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New Rates

• New rates:
• The total contribution rate has been adjusted

from 0.63% to 0.75% of gross wages

• 0.62% for medical leave

– Employers with 25 or more employees pay 60% – Employers with fewer than 25 employees not required to pay any portion

• 0.13% for family leave

– Employers not required to pay any portion

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Applicable W ages

• Withholdings are based on wages up to the social

security max

• Currently $132,900 (adjusted annually)
• Definition of wages for PFML purposes has been

aligned with MA Unemployment Statute definition of wages

• Use wage base that you use for unemployment

– Salaries, hourly pay, non-cash tips, and stipends – Commissions and bonuses – Overtime, vacation, or sick pay – 401K employer contributions

• If you are excluded from making unemployment

contributions, same exclusion applies to PFML

– Examples: real estate brokers paid on commission

• Tax issue is awaiting guidance from IRS

– For now, assume after-tax wages

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Tim eline

December 20

• Application for

exemption for private plan

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Exem ption for Private Plan

• Exemption available on an annual basis for

paid family and/ or medical leave under PFML.

• The benefits offered must be greater than
• r equal to the benefits provided by PFML

– Must meet all minimum requirements (including benefit level and length of leave) – Must not cost employees any more than they would be required to contribute to the Department

• The plan must be approved by the

Department

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Private Plan

• Can be fully insured or self-insured
• If insured, policy must be issued by a

Massachusetts licensed insurance company

• Unaware of any fully insured plans approved

by state, but carriers are working on them

– Therefore, at this point, only option is a self- insured plan

• Self-insured plans require a bond

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Bonds for Self-I nsured Plans

• Bond form available at the Department
• Bond amount based on the following values, which are

multiplied by the 52 weeks in the bond period:

1) 2018 average workforce count 2) 2018-2019 statewide average weekly wage (i.e., $1,383.41) 3) 2019 PFML contribution rate:

– 0.13% for family leave only – 0.62% for medical leave only – 0.75% for both family and medical leave

• For family leave plans: 2018 Average Workforce Count x

$1,383.41 x 0.0013 x 52

• For medical leave plans: 2018 Average Workforce Count x

$1,383.41 x 0.0062 x 52

• For family and medical leave plans: 2018 Average

Workforce Count x $1,383.41 x 0.0075 x 52

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Covering Form er Em ployees

• Definition of “covered individual” includes

former employee who has been separated for less than 26 weeks

• One of the questions on the application for an

exemption is: “does your plan cover unemployed former employees who apply for benefits for family or medical leave for up to 26 weeks after separation from employment,

• r until they obtain other employment,

whichever is sooner?

– We understand that plans have been rejected if they do not provide coverage for former employees for 26 weeks after separation

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Applying for an Exem ption

• Submit an annual approved plan application

to the Department

• The electronic approved plan application through

MassTaxConnect beginning April 29.

• Deadline for first quarter is December 20
• The Department will approve or deny

exemption within 1-2 days

• If approved, employers will upload a copy of the

plan on which the exemption is based.

• If denied, employers will be notified why it was
• denied. Employers may request a follow-up

review if they disagree with the basis for denial.

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I s A Private Plan Right For You?

• Do you currently offer short or long term

disability?

• If so, determine the following:

– What is the employer cost per year (current cost is likely less than the future cost of an insured, compliant plan but is a good starting point) – What is the max benefit for employees – What does the employee pay – What is the timing of claim approval and benefit payment

• Compare to same factors under PFML

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I s A Private Plan Right For You?

• Determine cost of bond
• Determine cost of self-insured plan
• CAVEAT
• Final regulations provide: “An employer . . .

who fails to maintain or renew a private plan exemption approved prior to January 1, 2021 may be responsible for retroactive contributions to the Trust Fund.”

• If you do not renew the private plan, must

notify covered individuals and the Department no later than 30 calendar days prior to effective date of termination

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Tim eline

January 31, 2020

• Remit PFML

contributions for Oct-Dec to MassTaxConnect

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Quarterly Filing and Contribution Paym ent

• File an employment and wage detail

report, on or before quarterly filing deadline established by the Department

• f Revenue
• For each employee, include:
• Name
• SS# or individual taxpayer ID
• Wages paid or other earnings
• For each employer:
• Based on FEIN

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Paym ents to MassTaxConnect

• Based on the quarterly employment and

wage detail report, the Department will calculate the total quarterly contribution amount owed

• Employers submit all contributions for

all covered individuals in their workforce through MassTaxConnect on or before the quarterly filing deadlines established by the Department of Revenue

– First deadline = January 31, 2020

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NEW HAMPSHI RE PAI D FAMI LY AND MEDI CAL LEAVE

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• Gov. Chris Sununu vetoed the bill that

would have required:

• Private paid family and medical leave insurance

plan or withdraw 0.5% of an employee’s wages to pay for a plan created by NH

• Up to 12 weeks of time off at 60% wages for

the birth or adoption of a child, a serious health condition of a family member, or the care of a member in the armed forces during foreign service with a serious injury or illness

• Takeaway
• Continue monitoring for further

developments in this area

Katy Rand

Merrill’s Wharf 254 Commercial Street Portland, ME 04101 Pease International Tradeport One New Hampshire Ave. # 350 Portsmouth, NH 03801

krand@pierceatwood.com

Suzanne King

sking@pierceatwood.com

PH / 207.791.1267 PH / 617.488.8159